The Nifty moved in a narrow range today, faced strong resistance above 5,130 and closed at 5,100 on lack of support at higher levels.
Nifty March futures showed weakness at higher levels and closed at 5,093, which is below the value area (5,100-5,115) for the day, as traders preferred to book profit at higher levels. The market picture charts which interpret actions of day traders indicate that if a security closes below its low-volume area, the area may be a potential resistance level in the future.
The Nifty is likely to face resistance above 5,100. The European markets closed in the red while the SGX Nifty was trading around 5,080 in after-market trades on over-the-counter exchange. So, the Nifty is expected to open on a weak note and may get support at 5,050-5,060. It is expected that the market may move in a narrow range in the near future as low trading volume in the futures and options segment in the last couple of days indicates no substantial long or short build-up.
The Nifty may lose support at 5,100 as call options traders sold the 5,100-strike call and covered short positions at the 5,100-strike put. However, the market has the potential to rise if it comes out of the trading zone with strong volumes. The Nifty may move above 5,100 with an interim upside target of 5,180 as 5,100- and 5,200-strike calls have seen long build-up in the last couple of days. Strong support continues around 5,000 as this strike put holds the maximum open interest among put options.
ICICI Bank has strong support around Rs 910 and may move up around Rs 935 as formation of long positions (open interest was up 0.22 million shares through buy-side trades) was seen at Rs 910-920. The stock closed above the low-volume area and above time-price opportunity areas, indicating strong undercurrent.